TL;DR
- 32% of consumers have cancelled a digital entertainment or fitness subscription only to rejoin later
- Nearly 1 in 10 survey respondents cancel because they could not pause
- Providing pausing options can continue the relationship with the consumer and makes it more likely for consumers to rejoin, or reactivate
In a recent survey of digital entertainment and fitness service subscribers, 72% of respondents considered these subscriptions to be discretionary spending. In an era of high inflation and fierce competition in the digital subscription space, it’s important to explore what’s driving consumer behavior related to churn:
- Why are consumers cancelling subscriptions to digital entertainment and fitness services?
- What do consumers expect from their experience with digital subscription services?
- What does it take for consumers to rejoin after cancelling their digital subscriptions?
Knowing these insights is key to helping your subscription marketing strategy and to decreasing customer churn.
One of the biggest reasons for subscriber churn can be attributed to a lack of options for pausing the service. Whether due to financial reasons or a desire to take a break after watching the latest season of a show, subscribers can feel that they are missing key options to pause their accounts. And with the proliferation of digital content platforms, consumers now expect to have more control over their subscriptions. Did you know that one-third of our survey respondents said they had cancelled a service only to rejoin later? This can be even higher depending on the type of service.
Here we share three customer-centric strategies that digital subscription brands can adopt to increase loyalty and prevent churn.
What strategies can subscription marketers implement for continued retention?
Given the cost of customer acquisition in the subscription space, retention strategies have always been a top focus. Especially in today’s inflationary market, consider thinking about customer “retention” in two categories:
- retaining regularly paying customers vs.
- retaining the relationship and making it easy for customers to turn services (and therefore payment) on and off
1. Create customer-centric marketing communications
Consumer decisions around subscriptions are multifaceted, with a variety of reasons impacting both selection and cancellation, including generational preferences. When a consumer decides to cancel a subscription service, cost savings, content exhaustion and lack of use all come into play.
Whatever the reason, brands should demonstrate their understanding of consumer needs. You can acknowledge that this is normal behavior in the subscriber-brand relationship, and welcome consumers back when they want to rejoin. The challenge, of course, is in keeping consumers engaged and understanding the value of the subscription over time. Explore how you can adjust messaging and adapt your ongoing communication plan to support these marketing efforts.
2. Offer the option to “pause” the subscription
Nearly one in ten survey respondents mentioned that they cancelled simply because there wasn’t an opportunity to pause. Those are customers who already know they don’t want to end the relationship with your brand, but they just need some space and time to determine their preferences.
Oftentimes, when consumers choose to unsubscribe, they’ve made the decision that they do not want to continue paying for the service at that point in time. A pause or a break meets this consumer need without completely terminating the service. And, depending on how your subscription pauses are managed, they can make it easier for consumers to pick back up where they left off and resume service when they’re ready. This may be once their financial or lifestyle circumstances change, or when new content is introduced that draws them back in.
Nearly 10% of consumers who have cancelled a digital subscription cited not having an option to pause.
3. Win back subscribers with tailor-made options
Did you know that among those who recently cancelled a subscription, 46% of those who deemed it an easy process were more likely to rejoin in the future? By eliminating a pain point for consumers, you improve your chances of retaining those subscribers in the future if they can easily rejoin.
On the other hand, only 12% of those who found it to be a difficult process were likely to return. Clearly, difficult exits can damage the relationship in the long run.
But how many people are we talking about that might want to take a break? Across the subscription categories we surveyed, an average of nearly one-half reported that they do not keep the same subscriptions consistently – switching out at least a few regularly. With such intense competition across categories, positive consumer sentiment can be the difference between these switchers deciding to come back to your brand versus going to a competitor.
Make it a pleasant experience for your users to disconnect. Whether they want to try something new or take a break, enabling a seamless process makes it more likely that you’ll see them, and the recurring revenue, again. And all of this comes at a lower cost than new customer acquisition! There’s also an added benefit of showing your brand “gets it” and wants to make users’ lives easier, not harder. As the subscription lifestyle evolves, it’s more important than ever to adapt to consumer needs and work with – not against – them.
Get subscription behavior insights for your category
The insights outlined here represent just a sample of the findings from SKIM’s ongoing first-party research into the subscription lifestyle. To date, we have interviewed 16,000 consumers in five countries to gain insights into subscription use, attitudes, and expectations.
Want to know more? Contact SKIM’s subscription behavior experts to dig deeper into the data and insights for your specific category.
SKIM provides subscription channel advisory and research services to the world’s leading brands in strategy, product portfolio optimization, pricing, communications, innovation, and decision journeys.
Learn more about our solutions to implement and optimize your subscription model or schedule a consultation.